1
List the major players within the U.S. healthcare system
A general overview of the major players within the U.S. healthcare system is displayed in Table 1-1 .
| Providers | Hospitals, physicians, nursing homes and home health, pharmacists, public health organizations |
| Payers/insurers | Government (Medicare, Medicaid, Veteran Affairs), managed care, employers, individual out-of-pocket (private, health maintenance organization, preferred provider organization, and others) |
| Suppliers | Pharmaceutical companies, medical device companies, biotechnology companies, medical equipment suppliers |
2
Define the role of a provider
Any organization or person licensed to deliver medical care services.
3
What is the distinction between payers and insurers?
A payer is any organization, group, or person that pays for the expenses associated with medical illness or injury of an enrollee or member. An insurer is an organization that allows multiple payers to pool risk over a larger group, and thereby each incurs a smaller fee to protect against a catastrophic medical event. Managed care, health maintenance organizations, and preferred provider organizations are insurers. Some organizations, such as Medicare, Medicaid, and Veteran Affairs, are insurers who provide payment through the U.S. Government.
4
Define the role of a supplier
Any organization or group that manufactures and/or develops a product or technique used for medical care.
5
When was the first hospital established in the United States?
In 1751, Benjamin Franklin and Dr. Thomas Bond established the first hospital in the United States, located in Philadelphia, Pennsylvania.
6
Describe the organizational management of a typical hospital
Hospitals are typically managed by two distinct entities: (1) the hospital administration and (2) clinical medical staff. The Chief Executive Officer (CEO) of the hospital oversees all administrative and clinical operations. Hospital administration is organized by an executive committee and/or board of trustees, which govern the hospital’s finance, building and grounds, and public relations committees. The administrative division may also oversee the medical records department, security system, and other departments responsible for the daily operating functions of the hospital. In contrast, the medical staff (which may include the dean of the hospital’s affiliated medical school) governs the clinical departments such as pediatrics, radiology, and urology. The department chairs are responsible for managing the structure and function of their respective departments, as well as the physicians within those departments. The nursing staff may governed by both the medical staff and the hospital administration. Because of the duality of power within a hospital system between clinical and administrative controls, it is not unusual for the CEO of the hospital to lack complete governing authority over the physicians within the same hospital.
7
Describe the differences between a community hospital and a specialized hospital
A community hospital is typically considered to be an institution that provides general medical care in the primary and acute setting to meet the needs of the community’s local people. A specialized hospital focuses on one or more medical specialties and does not always provide general medical care. Examples of specialized hospitals include psychiatric hospitals, children’s hospitals, and orthopedic surgical hospitals.
8
Describe the differences between nonprofit and for-profit hospitals
Whereas both nonprofit and for-profit hospital systems provide similar medical services, they maintain different financial management structures. Nonprofit hospitals are organized as nonprofit corporations, meaning they are not owned by private investors and are not responsible to any shareholders. It is important to note that this does not mean these hospitals do not realize profits but rather that they do not act to maximize profits for any group of shareholders. These hospitals are usually limited to producing only a certain percentage of profit per year, such as 3–4%. All other profits must be either reinvested into the hospital for further development of the hospital system or externally invested for capital gains, which can lead to greater hospital improvements in the future. This is the reason that many nonprofit research medical centers continue to renovate and build new hospitals and research departments. Although the corporation itself is limited in its ability to produce profits, the physicians and staff within the hospital are still able to produce a profit in return for their services.
For-profit hospitals are owned by shareholders who keep stock in the corporation. A for-profit organization is first and foremost responsible to its shareholders. The underlying goal is to maximize profits for its investors, which are the shareholders. Although these hospitals often provide excellent medical care, some may focus their care toward specialties that produce larger profits such as cardiology and provide fewer resources for less profitable departments such as emergency medicine. A few of the large for-profit hospital systems in the United States include Columbia/HCA, Tenet, and HealthSouth.
9
Explain the role of a teaching hospital
A teaching hospital’s mission is to provide medical training for residents and medical students, although not all provide training for both. The majority of teaching hospitals are affiliated with academic medical centers.
10
Describe the role of a physician within an academic medical center
Physicians within academic medical centers may have several different roles encompassing patient care, teaching, research, and administrative duties. The amount of time spent between these various roles differs by physician. In non-academic hospitals, physicians may still split time between these roles. However, physicians in non-academic hospitals are more likely to focus a majority of their time on patient care. In contrast, it is not uncommon for academic physicians to see patients 1 or 2 days per week and then spend the rest of their time teaching and/or conducting research.
11
What is the role of JCAHO?
JCAHO stands for the Joint Commission on Accreditation of Healthcare Organizations. JCAHO is responsible for setting the minimum standards of healthcare for all U.S. hospitals. Throughout the year, the organization visits each hospital to ensure that these standards are maintained and accreditation is justified. JCAHO is now more commonly known as The Joint Commission.
12
What is a hospital information system?
It is a complex, integrated system designed to optimize storage and transfer of information for both administrative and clinical divisions of the hospital. This system can be electronic and/or paper and may involve the use of one or more software programs. More recently, hospitals have been moving toward becoming paperless through the implementation of the electronic medical record (EMR) and computerized physician online electronic (CPOE) ordering system.
13
What is the role of health insurance?
The purpose of health insurance is to pool risk and protect one from incurring a substantial financial loss related to a medical expense.
14
Describe the Medicare program
Medicare is a federally funded insurance program that provides coverage mainly to patients aged 65 years or older. The program was implemented in 1965 as an addendum to the Social Security Act. It was later expanded to cover blind individuals, patients with end-stage kidney failure, and younger disabled persons. Persons age 65 and older are automatically enrolled in Medicare Parts A and B if they have paid Social Security payroll taxes for a minimum of 10 years while employed, or if they meet other specific requirements. Patients with Medicare must still pay a monthly fee that is subsidized by the government and therefore relatively less expensive than most private insurance premiums. Many people may additionally still have copayments, deductibles, or other healthcare costs. The amount depends on the insurance plan they choose to enroll in.
The Medicare program is currently split into several parts. Part A is responsible for hospital reimbursement. Part B provides physician reimbursement. Medicare+Choice, sometimes referred to as Part C, includes healthcare plans that must be obtained through private insurance and requires participation in Parts A and B. Medigap is a plan sold through private insurance companies to fill the gaps in Parts A and B. Part D was implemented with the passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The purpose of Part D was to provide some drug prescription coverage. However, the coverage can vary significantly from state to state.
15
Describe the Medicaid program
Medicaid is both a federal and state funded insurance program that provides coverage mainly to the poor, as defined by those individuals maintaining a certain income level relative to the federal poverty line. It also provides a significant amount of coverage to children and pregnant women living at certain thresholds of the poverty level. The program was implemented in 1965 along with Medicare as an addendum to the Social Security Act. Although it is a federal program, money is divided among each of the states and is used as dictated by each state’s legislation. Therefore, there is state-by-state variation in eligibility specifications and insurance benefits.
16
List the federally owned health systems
Currently there are three federally owned health systems: the Veterans Health Administration, the Department of Defense, and the Indian Health Service. Hospital care clinic visits and insurance are included in these health systems. These health systems are distinctly different from nonprofit and for-profit health systems.
17
Describe the role of the Veterans Health Administration
The Veteran Affairs (VA) health system is a federally funded organization run by the Veterans Health Administration that provides eligible veterans with hospital and clinic care, as well as insurance coverage, all within its own organization. About 5–6 million patients receive care through the VA health system. More than 20 million patients are eligible for coverage, but many choose to receive care elsewhere. The amount of coverage can vary and is dependent on time served in the military, setting of military service, and service-related disability. Prescription drug coverage is available to some patients, although there may be an associated copayment. VA hospitals are unique in that they do not have a level 1 trauma emergency department. Many patients receive initial care at larger hospitals and then are transferred to the VA hospital after their condition is stabilized. About two thirds of VA hospitals are set up in close proximity to academic medical centers and are staffed by academic physicians.
18
How do medical records in the VA health system differ from those of other systems?
The VA health system has the United States’ only nationalized electronic medical record called the Computerized Patient Record System (CPRS). A patient can receive care in a VA hospital in California on one day and then go to a VA hospital in New York a day later and have all medical records available. Although the VA health system has offered to provide CPRS to other health systems at no cost, thus far nobody has begun using it. The main reason is that CPRS does not have a billing system linked to its medical records. Although this type of system works for the government-funded VA health system, others cannot implement an electronic system without a billing component.
19
Describe the role of the Department of Defense in health care
TRICARE is a regionally managed healthcare program run by the Department of Defense to provide healthcare services for military personnel, military retirees, and their dependents. Healthcare is also provided for the direct families of these members.
20
Describe the role of the Indian Health Service
The Indian Health Service is responsible for providing federal health services to American Indians and Alaska natives.
21
What is managed care and how did its role develop in the United States?
Managed care is a system originally designed to control the cost of care while trying to maintain the quality of care and patient satisfaction. The concept was first promoted by the Nixon Administration under the direction of Dr. Paul Elwood in the 1960s. In 1973, under the Reagan Administration, the Health Maintenance Act was passed as the first form of managed care. Managed care has been credited with controlling some of the rising cost of medical care in the 1980s and again in the 1990s under the Clinton Health Plan. However, in the late 1990s, a managed care backlash ensued from patient and advocacy groups complaining that cost-control measures had gone too far. Although managed care has lost some popularity, it is estimated that almost all facets of healthcare have some remnant of managed care influence.
22
What is a health maintenance organization (HMO)?
An HMO is a system designed to produce cost savings by creating an optimal protocol system. HMOs contract their own physicians and staff. Primary care physicians (PCPs) serve as gatekeepers to specialized care and are typically required to follow several protocols for a variety of processes including diagnostic tests and choice of prescription medications. Patients are commonly required to provide a copayment for each visit to their PCP. Additionally, they are limited to visiting only the physicians within the HMO network.
23
Explain how a preferred provider organization (PPO) differs from an HMO
Although PPOs form contracts with physicians who will provide services, they allow patients to visit physicians outside of the network in return for a payment premium. Additionally, PPOs generally do not have copayments and instead offer deductibles and coinsurance programs.
24
What are out-of-pocket costs?
These are costs that are directly covered by the patient. There are three common types of out-of-pocket expenses that may be incurred while the patient has insurance. These three costs and their descriptions are displayed in Table 1-2 . These costs may occur independently or simultaneously.
